Rell: Tough decisions needed with bad economy

News-Times, The (Danbury, CT), Ken Dixon Staff writer

Published
1:00 am EST, Monday, December 8, 2008

CROMWELL -- Gov. M. Jodi Rell will begin negotiations this week with state-employee unions in attempt to gain contract concessions, as the General Assembly prepares to confront its worst deficit since 1991, the year the personal income tax was adopted.

Rell, speaking to reporters Monday after her annual holiday-breakfast speech to the
Middlesex Chamber of Commerce
, declined to say what kind of concessions she will seek from union members, whose health-benefits package, negotiated in 1997 when
John G. Rowland
was governor, runs until 2017.

The governor has said that she doesn't want to force employee layoffs. But with a deficit of as much as $6 billion looming over the next two years, Rell stressed the need for the General Assembly to avoid raising taxes in 2009.

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After speaking to about 900 people at the chamber's annual holiday breakfast, Rell said that the state has to scale back to its "core mission" including education and public safety.

"Right now we simply have to get back to the basics," said Rell, who has been meeting with her budget staff and department commissioners "three or four days a week" as she drafts the budget she'll present to the General Assembly in February.

On Nov. 25, Rell announced she hired an attorney from a local law firm to represent the state with the coalition of state-employee unions. Last week, she met in Philadelphia with President-elect
Barack Obama
and other governors and last week she attended a Council of State Governments conference in Omaha.

She recalled one of her fellow governors, a Democrat, said that raising taxes in the vulnerable economy is not recommended.

"The reason it's the worst thing to do, is because you want to position yourself so that when we do come out of this recession -- and we will come out of it, we always do -- you're not saddled with more taxes and you're not saddled with more debt; you can actually grow and get out of the recession that much quicker and stronger," Rell told reporters.

But House Majority Leader
Christopher G. Donovan
, D-Meriden, who attended the speech, said Rell's basing her "bleak" assessment on what the Bush administration has created, not on solutions that President-elect Barack Obama may develop.

Rell said that Connecticut's formerly booming economy is "the ghost of Christmas past" and she's prepared to make the tough decisions to scale down the state budget to match reduced revenue.

She said "the truth is not pretty," and that the current $18.2-billion state budget is too big for taxpayers to support, especially at a time when the state's middle class is reeling from the economic downturn and "has had its sense of security badly shaken." But the governor said she's ready to address the new fiscal realities.

The challenges are daunting, she said, but they present both an opportunity to align the government "core" responsibilities.

She called for legislative leaders with "backbone to make hard choices," and to be prepared for what it's going to take to downsize state government as a deficit of $6 billion looms next year.

"Never in my time as a public official has the perfect storm of national and international economic factors battered our state economy so severely," Rell said. "And never in my time will the actions of state government be felt so keenly, by so many -- for so many years to come."

She said that the way the General Assembly crafts the next two-year budget will play a big part in "determining how quickly -- and how strongly -- we come out of the recession." She called the recent special session of the Legislature to address a $288-million shortfall "baby steps," but the session that starts Jan. 7 will require "giant steps" to address the deficit.

"Let me just say that all of the bad news has led many to wonder how our state will survive this," she said. "My answer is that mere survival is not our goal."

"The fact that Connecticut has weathered this economic storm better than many states is of little comfort to those who have seen their retirement accounts evaporate," she said. "It is small solace to businesses that have closed their doors or to workers suddenly unemployed." She said that state residents want government to sharply cut back its costs.

"They can't afford to pay even more in taxes -- at any level of government," Rell said. "They want us to do what they are doing -- cut back. They want us to continue making the same hard choices they are making every day."

Donovan, the incoming speaker of the House, who attended the breakfast, said afterward that Rell presented "a bleak condition," based on the current administration in Washington.

"We know things aren't looking good," Donovan said in a phone interview this morning. "But we're going to have a change in Washington. The hopeful tone of Obama should be heard here in Connecticut, so we can inspire everyone to find solutions." Donovan said the recent special session was merely a "first step" based on projections that may change before Rell presents her biennial budget in early February.

"My hope is to work with D.C.," Donovan said, adding that legislative committees with members from all over the state will be determining the state's priorities.

"If we initiate some stimulus at the local level, maybe we can change the direction."